Carlson Restaurants operate some 900 restaurants globally and over the last few years have driven immense value from the Net Promoter process in the US. You may not immediately know the Carlson name but if you live in or have visited the US you will probably have spent time in one of their well-known TGI Fridays locations, I know I have.
A couple of days ago Amisha Sinha (Vice President Business Planning at Carlson Restaurants Worldwide) sat down with me to discuss how the organization has driven success in its business with the Net Promoter approach.
Making the Big Leap to Net Promoter
Carlson operates in a very saturated market where customer loyalty is hard to come by, so it is important for the organisation to understand how to deliver the right customer experience every time.
In 2009 the organisation, unhappy with the “overall satisfaction” metric that it had been using, swapped to a Net Promoter Score approach. The result has been a slow burn success story that is now at the core of driving the business day to day.
Net Promoter data collection at the restaurant chain starts with a simple internet survey link printed on every N’th receipt. From there customers fill in a short (more about this later) ten or so question survey starting with the Net Promoter question. Other questions include rating scales for various driver attributes and a qualitative “What was great about your experience and what can be improved about your experience”.
In the early days after the change, keeping momentum with the new approach wasn’t easy. People in different parts of the organization wanted to see immediate proof of its value. To keep moving required more than just “trust me” so the team used initial small wins along the way as the pointer of things to come. Success in individual restaurants demonstrated the value of the approach. Then over time, as the data set grew, the results became clear and Carlson uncovered valuable insights that were leveraged to drive broader success.
The Four Big Insights
1. You Need to Reach Threshold NPS Before it Matters
Ms Sinha explained that below a certain threshold NPS, there is not a meaningful link between the score and other business metrics. Under that threshold, a few points gain in Net Promoter might have little to no impact on revenue or profits.
However, above that threshold, improvements in the score are well correlated with important business metrics and a change of a few points can have significant impact on the performance of the individual restaurant.
Uncovering the idea of a threshold was difficult. It was not until the organisation reached a critical mass of locations that met or exceed the threshold did it became clear how important it was.
So what is that threshold? As Ms. Sinha told me:
The number doesn’t matter, only that there is a threshold. You have to know what that threshold is for you but there is no such thing as an absolute threshold, only one that is relevant to your business.
2. Consistency is Important
To be successful, not only do restaurants need to meet or exceed the threshold NPS but they also need to be consistent in their performance. Locations that had one good month followed by a bad month do not fare well.
To track this Carlson uses two measures:
- Rolling three month NPS
- Monthly NPS
The first is used to track consistency and overall score. The second to diagnose issues so action can be taken in real time.
3. The Grand Theory of Everything: It is all Linked
One of the really exciting insights is that once over that magic NPS threshold, everything starts to come together. Locations with a good NPS not only have good revenue numbers, they also score well on cost control, have better traffic, higher profitability, lower employee turnover and higher employee engagement. They are at the top of their game.
It is almost as if by hitting the right NPS all the areas of the business start working at a higher level of efficiency and effectiveness. This simple but powerful finding made believers of the Net Promoter approach across the organisation.
4. Drive the Behaviour not the Score
Put simply, you can’t drive the score. All you can do is drive the right attributes and behaviours. Carlson has spent a lot of time identifying what those right behaviours are and then acting on them.
The initial survey was much longer; almost three times as long, as the current survey. Through a robust process of data analysis and refinement the analytics group uncovered which service attributes were most important in driving Net Promoter. With that information the company not only pared the survey down to the essential questions, it also fine-tuned programs to drive those attributes.
In 2010 and 2011, Phase 1 of the service focus was all about fundamentals and consistency not differentiation. It focused on providing staff with tools and training to deliver on guest expectations.
Phase 2 started a year later and was a hard core drive on service personalization and differentiation.
Underlying this is that, by its nature, the business has a higher levels of staff turnover and there is a need to constantly train staff. As a result of this program Carlson has raised the bar on what it expects from staff and their training with a big emphasis on service training.
Finally: The Key to Success
Having talked all this time about Net Promoter you, and I, might be forgiven for thinking that this was a discussion about customer loyalty. You would be wrong and Ms. Sinha set me straight:
My focus is on the business performance that customer loyalty drives. We have a mix of company employees and various franchise groups. I need to convince them that customer loyalty is good because it drives revenue and profitability.